The King of Mountain View (Eric Schmidt, Google CEO) has declared that credit cards could become a thing of the past if the people fall under the sway of his magic Gingerbread.

Schmidt has been showing off a new phone at this year’s Web 2.0 Summit in San Francisco which runs on Android 2.3 (aka Gingerbread) and contains an Near Field Communication (NFC) chip. The chip will allow you to pay for things on the high street by simply swiping it over a reader, a bit like an Oyster card.

According to the Telegraph, Schmidt, who opened the conference, said that this “tap and pay” method of purchasing “could replace your credit card.”

Schmidt says that credit card companies and retailers would be working on payment services and not Google itself. “The reason this NFC chip is so interesting is because the credit card industry thinks the loss rate is going to be much better, they’re just more secure.”

Obviously payment services are going to take some time to set up, so don’t expect to be able to tap to pay for things in WHSmiths as soon as Android 2.3 phones land. Schmidt said that we can expect to see Gingerbread arriving in the “next few weeks”.

He also emphasised that the new NFC chip provides a fresh start for app developers who can take advantage of the new “bump for everything” technology. We’re pretty excited about the possibilities already – how cool would it be if you could share Spotify playlists with your friends, simply by bumping your Android phones together?

Lastly, this news also sheds a little more light on the enigmatic Google Nexus S. The Telegraph reports that the manufacturer’s name on the device was deliberately covered up. But take a closer look at that picture above – that phone looks an awful lot like the one from those leaked Nexus S pictures, don’t you think?